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1. With lower values for gasoline than a couple of years before will Americans start spending again? If they do, what will they spend the savings on Vacations? Some other expenses?
2. In many industries, such as supermarkets, banks, cell phone companies, etc., because of mergers our choices as consumers are reduced to two or three competitors. Do you think this is good for the economy? What are some of the reason why mergers happen? Should the government do something about this?
Write down the relationship between savings, capital formation, and consumption.
Assume that the MPC is .8 and that $10 trillion of real GDP is currently being demanded. The government wants to increase real GDP demanded to $11 trillion.
What is likely to happen to the number of gliders sold if Emerson follows company policy and raises the glider price to that calculated in part b?
Assume the airline industry consisted of only 2 firms: American and Texas Air Corp. Let the two firms have identical cost functions, C(q) = 40q. Suppose the demand curve for industry is given by P = 100 - Q and that each firm expects the other to ..
The airline has an average of 40 passengers paying an average of $200 for this flight. Do you think the airline should be flying between the two cities? Evaluate from a short-run and long-run perspective.
Explain why do economists attempting to forecast short run future changes in real GDP and employment look closely at data on business inventories and unfilled orders.
Illustrate what will be the actual dollar change in revenue and does it rise or fall.
How income may change savings behavior
Calculate the breakeven level for the subsiquent YoYo firm. The firm has overhead.
Those who advocate that the Federal Reserve target monetary aggregates usually argue that the Fed should not alter its monetary targets in response to temporary changes in macroeconomic conditions
Two goals of monetary strategy in the United States are price stability and full employment. Explain with the help of the appropriate graphs.
In 1929 and 1933, GDP measured in current prices fell from $96 billion to $48 billion. Over the same period, relevant price index fell from 100 to 75.
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